Illegal logging accounts for 15-30 percent of forestry in the tropics and is worth $30-100 billion worldwide, alleges a new report published by the United Nations Environment Programme (UNEP) and INTERPOL. Consuming countries play a major role in the trade, which is increasingly sophisticated and in some places is facilitated by the expansion of industrial plantations.

“Illegal logging is not on the decline, rather it is becoming more advanced as cartels become better organized including shifting their illegal activities in order to avoid national or local police efforts,” wrote Achim Steiner and Ronald Noble — the heads of UNEP and INTERPOL — in the report’s preface. They go on to add that illegal logging is jeopardizing REDD+ (Reducing Emissions from Deforestation and forest Degradation), a program aimed to reduce rural poverty and recognize the value of services afforded by healthy forests.

"If REDD+ is to succeed, payments to communities for their conservation efforts need to be higher than the returns from activities that lead to environmental degradation. Illegal logging threatens this payment system if the unlawful monies changing hands are bigger than from REDD+ payments."

In Asia particularly, timber plantations for pulp and paper production are being used to launder illegal timber. The report points to a flatlining in the extent of timber plantation coverage in Indonesia but a surge in "plantation timber" production.

"In many cases a tripling in the volumes of timber 'originating' from plantations in the five years following the law enforcement crack-down on illegal logging has come partly from cover operations by criminals to legalize and launder illegal logging operations."

Plantation in Indonesia: a new frontier in black wood laundering? Courtesy of Green Carbon, Black Trade.

Illegal logging is facilitated by corruption at high levels of government in some countries. Leaders in countries ranging from Malaysia to Liberia have lined their pockets with the proceeds of illicit timber extraction. But damage goes beyond taxpayers. Illegal logging can be tied to violent conflict, as the report notes in a case study from the Democratic Republic of the Congo. The report says that illegal logging can also be a threat to traditional forest-dependent communities.

"Illegal logging operations have also in some cases involved murder, violence, threats and atrocities against indigenous forest-living peoples," it states. "The challenges already facing indigenous peoples are further compounded as companies now launder illegal logging under fraudulent permits for ranches or plantation establishment schemes."

Illegal logging is a big international business. The report says that "laundering of illegal timber is only possible due
to large flows of funding from investors based in Asia, the EU and the US, including investments through pension funds." It provides an example in Samling Global, a Malaysian firm linked to illegal logging in several countries. When Samling's activities were exposed by environmental campaigners, Norway's sovereign wealth fund stopped funding the company. Yet finance continued to flow through some of Wall Street's biggest names, including Goldman Sachs, Charles Schwab, and BlackRock.

The report argues that various certification bodies and programs — ranging from Voluntary Partnership Agreements (VPAs) to the Forest Stewardship Council (FSC) to CITES — aren't enough to stem the trade in illegal wood products.

"They were not designed to combat organized crime and are not effective in combating illegal logging, corruption and laundering of illegal timber in tropical regions," the report states. "To become effective, voluntary trade programs and the effective implementation of CITES, must be combined with an international law enforcement investigative and operational effort in collaboration with domestic police and investigative task forces in each country."

Unsurprisingly given the INTERPOL's co-authorship, the report makes a case for channeling more money into law enforcement and training efforts.

Efforts to stop this black trade must concentrate on increasing the probability of apprehending illegal logging syndicates and their networks, reducing the flow of timber from regions with high degree of illegality by adapting a multi-disciplinary law enforcement approach, developing economic incentives by discouraging the use of timber from these regions and introducing a rating [system for logging] companies based on the likelihood of their involvement in illegal practices to discourage investors and stock markets from funding them. When combined with economic incentives, through REDD+ and trade opportunities through CITES and FLEGT, these actions may become successful in reducing deforestation, and ultimately, carbon emissions. Priority attention must also be given to investigation of tax fraud, corruption and anti-laundering, including substantially increasing the investigative and operational capacity of national task forces working with INTERPOL, against logging companies, plantations and mills.

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